Lender Amigo's chief executive quits after less than five months in charge

The chief executive of high interest rate lender Amigo, Hamish Paton, has resigned this morning after less than five months in the job.

He is joined by chairman Stephan Wilcke, who has told the board he will not look for a new mandate at the firm’s next shareholder meeting next year. Remuneration chair Clare Salmon will also follow suit.

Read more: Lender Amigo changes plan as regulator gets less friendly

Amigo is a guarantor lending specialist. This helps people with bad credit ratings borrow by nominating a guarantor to make payments on the loan if they cannot.

But it has come under mounting pressure from regulators in recent months, amid concerns that guarantors do not know what they are getting themselves into.

The Financial Conduct Authority has also said Amigo’s 49.9 per cent annual interest rate could cause customers to become stuck in a cycle of repeat borrowing. 

Last month, it warned the company that it should include more explanation of key information, and give more disclosure about the likelihood that a guarantor could be required to make payments.

Read more: Peer-to-peer lender Zopa makes banking debut as pressure mounts

Then, Amigo insisted the watchdog had not raised any concerns about the lender’s product or its underlying business model.

Shares rose 1.5 per cent this morning.

The guarantor lending sector has ballooned in recent years following the decline of payday loan companies such as Wonga. Amigo has cashed in on this, but the FCA has also started paying it more attention.